J Sainsbury plc is a leading UK food retailer with interests in financial services. It consists of Sainsbury's Supermarkets, Sainsbury's Local, Bells Stores, Jacksons Stores and JB Beaumont, Sainsbury's Online and Sainsbury's Bank. The decision to diversify into convenience stores is discussed further within a Porters 5 forces analysis. Their objective is "to serve customers well and thereby provide shareholders with good, sustainable financial returns. They aim to ensure all colleagues have opportunities to develop their abilities and are rewarded for their contribution to the success of the business. The company's policy is to work with all of our suppliers fairly, recognising the mutual benefit of satisfying customers' needs; a concept which is considered in the Porter's 5 forces analysis. They also aim to fulfill responsibilities to the communities and environments in which they operate" (Sainsbury's, 2008) a point which is discussed within a PESTEL analysis.
Sainsbury's serves 16 million customers each week in 455 supermarkets and 301 convenience stores across the country. The company employs 148,000 colleagues committed to delivering 'Great Food at Fair Prices'. Yet more examples that can be included as a strengths in a SWOT analysis.
Sainsbury's sells £6bn of British food every year, an obvious strength in a SWOT analysis. The company works closely with smaller-scale suppliers to expand local sourcing wherever possible, and has a network of over 3,500 local suppliers. In May 2006, Sainsbury's launched Supply Something New, an innovative scheme to make it easier for small and medium-sized suppliers to gain access to Sainsbury's and make locally produced food available to more customers (Annual Report 2007). This could be argued to be an important element in a PESTEL analysis.
PESTEL analysis
PESTEL analysis - Political Factors
PESTEL analysis - Economic factors
PESTEL analysis - Social factors
PESTEL analysis - Technological
PESTEL analysis - Environmental factors
PESTEL analysis - Legal factors
Porter's 5 forces analysis
Porter's 5 forces analysis - Competitive rivalry
Porter's 5 forces analysis - Barriers for entry
Porter's 5 forces analysis - Threats of Substitutes
Porter's 5 forces analysis - Buyer power
Porter's 5 forces analysis - Supplier power
SWOT analysis
SWOT - Strengths
SWOT - Weakness
SWOT - Opportunities
SWOT - Threats
Conclusion
Through this piece it can be seen through the various analyses; Porters 5 Forces, PESTEL and SWOT, that Sainsbury's is an iconic British food brand, well loved by its consumers. It had been suffering but since 2004 its image, and importantly profits, have improved tremendously. However, it is not insulated to many outside risks like recession and rising material costs as highlighted in the PESTEL analysis. Although it has shown steady growth it is important for Sainsbury's to go the next level by challenging Tesco, a competitor identified in the Porters 5 forces analysis, either by thinking of international expansion or on price. This in conjunction with its increasing property portfolio and alternate businesses should help in continuing the strong growth path, as well as tiding over threats (SWOT) in its external environment.
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